Bitcoin More Stable Than Gold, DXY, & NDQ, What This Means

Data shows Bitcoin has been more stable than gold, DXY, Nasdaq, and S&P 500 recently, here’s what history says could follow next.

Bitcoin 5-Day Volatility Has Fallen Below That Of Gold, DXY, Nasdaq, And S&P 500

In keeping with the newest weekly report from Arcane Research, BTC has been more stable than these assets for a record duration already this yr. The “volatility” is an indicator that measures the deviation of every day returns from the typical for Bitcoin.

When the worth of this metric is high, it means the crypto has been registering the next amount of returns in comparison with the mean, suggesting that the coin has involved the next trading risk recently. However, low values imply there haven’t been any significant fluctuations in the value in recent days, showing that the market has been stale.

Now, here’s a chart that shows the trend within the 30-day volatility for Bitcoin over the course of its entire history:

The worth of the metric seems to have plunged in recent days | Source: Arcane Research’s Ahead of the Curve – January 10

As shown within the above graph, the Bitcoin 30-day volatility is at very low levels currently as the value has been trading mostly sideways in recent weeks. The present values of the indicator are the bottom since 2020, but they’re still higher than among the lows during previous bear markets.

One consequence of this recent flat movement has been that BTC has develop into more stable than assets like gold, DXY, Nasdaq, and S&P 500. To check these assets’ volatilities against one another, the report has made use of the 5-day volatility (and never the 30-day or 7-day one).

The below table highlights the periods in BTC’s lifetime when the crypto’s 5-day volatility has been concurrently lower than all these traditional assets.

Looks like such occurrences have been a really rare event | Source: Arcane Research’s Ahead of the Curve – January 10

Because the table displays, there have only ever been a handful of instances where the Bitcoin 5-day volatility has been lower than that of gold, DXY, Nasdaq, and S&P 500 at the identical time. The report labels such occurrences as “relative volatility compression” periods.

It looks like, before the newest streak, the best duration of this trend was just 2 consecutive days. Which means the present relative volatility compression period is already the longest ever within the coin’s history.

One other interesting fact within the table is the entire returns in Bitcoin that were observed within the 30-day period following the primary date of the volatility compression in each of those instances. Besides one occurrence (September 29, 2022), all other volatility compression periods were succeeded by the value becoming highly volatile and registering large returns.

It now stays to be seen whether an analogous pattern will follow this time as well, with Bitcoin experiencing a wild next 30 days after this seriously flat price motion.